Home News Mortgage Fraud: NJ Developer, Attorney Admit Swindling Lenders Out Of $3.5M

Mortgage Fraud: NJ Developer, Attorney Admit Swindling Lenders Out Of $3.5M

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A New Jersey real estate developer and attorney admitted to conducting a multi-tiered mortgage fraud that cost the bank more than $3.5 million, federal officials said.

Watchung developer Victor Santos, 63, said he paid stand-in “straw” buyers $5,000 each to first buy 12 properties in Newark and then secure tenants to lease them. Federal Attorney Philip R. Sellinger said.

He and a group of co-conspirators, including Millington’s attorney Fausto Simoes, 69, covered the costs, including fees and mortgage payments, the US attorney said.

“Santos, Simoes and others have also caused mortgage lenders to submit fraudulent and false loan applications and documents,” Sellinger said.

“By using the identities and credits of these straw purchasers, Santos, Simoes, and their co-conspirators were able to hide their identities as the actual purchasers of the properties from the lenders,” he said. rice field.

“Simoes closed 10 fraudulent transactions,” Sellinger said, adding that the attorneys “perpetuated the fraud by falsely reporting that straw buyers provided the cash required for closing. Simoes actually received the money from a vendor,” he added. A shell company controlled by Santos and another conspirator.

“For some of the transactions, Simoes also failed to disclose to lenders that shell companies controlled by Santos and another co-conspirator would receive significant payments from the proceeds of the loans,” he added.

“Shortly after the property was acquired, Santos and his co-conspirators broke their promise to pay the mortgage,” Sellinger said. I didn’t have enough money to pay the fraudulently obtained mortgage and I defaulted.”

Lender Fannie Mae and insurance companies lost more than $3.5 million, he said.

Sellinger said Santos and Simoes, like the other two co-conspirators, were dealt with by the government rather than risk the outcome of the trial.

Each pleaded guilty to conspiracy to commit bank fraud in a video conference with U.S. District Court Judge Michael A. Shipp in Trenton. A judge was scheduled to sentence Santos on April 12, 2023 and Simoes the next day. His two other unidentified confessed co-conspirators are awaiting sentencing.

Sellinger acknowledged that the special agent in the Office of the Inspector General of the Federal Housing Finance Agency and the FBI conducted the investigation that led to the guilty plea, and Charlie Devine, special assistant to the Office of the Inspector General of the Federal Housing Finance Agency. and secured by Kevin DiGregory. She was assigned to Newark’s Economic Crime Unit.

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